News

In recognition of Financial Literacy Month in Canada, Bridgehouse Asset Managers today releases the results of the Bridgehouse Investor Knowledge Index, a new initiative to advance investor knowledge among Canadians. Research by Environics’ Financial Services practice supported the creation of the Index.

Read the release about the Bridgehouse Investor Knowledge Index below:

PRESS RELEASE

BRIDGEHOUSE ASSET MANAGERS (BRIDGEHOUSE) RELEASES RESULTS OF NEW SURVEY AND LAUNCHES AN INITIATIVE TO ENCOURAGE AND ADVANCE INVESTOR KNOWLEDGE AMONG CANADIANS

Toronto, ON, November 27, 2013

– In recognition of Financial Literacy Month in Canada, Bridgehouse Asset Managers (www.bridgehousecanada.com) today releases the results of the Bridgehouse Investor Knowledge Index, a new initiative to advance investor knowledge among Canadians.

The survey, conducted for Bridgehouse by Environics Research, measured 1,004 Canadian investors’ understanding of investment terms and concepts, from the definition of bonds and equities to dollar‐cost averaging and the difference between active versus passive management.

Participants scored an average of 39%, indicating significant room for development and education in investor knowledge. But encouragingly, 72% of participants noted they would like to learn more about investing to help them manage their finances more effectively—and 93% want the education system to include lessons covering basic investing and financial principles. Bridgehouse is committed to partnering with financial professionals to meet investor knowledge needs for Canadians of all ages.

Bridgehouse’s President Carol Lynde says “Advancing investor knowledge of all Canadians is a strategic focus for our firm. The Bridgehouse Investor Knowledge Index is our newest initiative emphasizing that commitment—and is an excellent forum to help identify areas where investors need more education, and provide an easy and effective way to deepen their investor knowledge.”

Bridgehouse Investor Knowledge Index: Key Highlights

While most Canadians were comfortable with the definition of bonds (70%) and equities (71%), few knew that different tax rates applied to different types of investment income: only 43% were aware that interest earnings were taxed at the highest rate, while just 24% knew that capital gains receive the most favourable tax treatment.

Most investors are under a misconception about Canada’s relative size in global equity markets: 27% underestimate its size, 27% overestimate its size and 23% have no idea what size it is. Dollar‐ cost averaging—an effective way of smoothing out the impact of market fluctuations when contributing to your portfolio—is a concept that is not familiar to most Canadians (63% got it wrong).

As firm believers in the benefits of active management, Bridgehouse was surprised to discover that more than 62% of Canadians don’t know the difference between active and passive investing.

Perhaps most shockingly, eight years after the federal government lifted the foreign content restriction, 82% of Canadians still believe there are limits in their portfolios. Although improved from the 2011 Home Bias Survey commissioned by Brandes Investment Partners & Co., which revealed that 95% of affluent Canadians were not aware the foreign content limit had been removed, there is still a long way to go to educate Canadians on their freedom to diversify globally.

“The Bridgehouse Investor Knowledge Index reveals that all investors—from novice to experienced—can benefit from deeper investor education”, said David MacDonald, Group Vice President at Environics, “Of 1,004 participants, there were surprisingly no perfect scores, demonstrating how crucial it is for Canadians to work with their investment advisors to deepen their investor knowledge and create sound investment plans.”

A version of the survey is now available as a multiple‐choice quiz at www.investorknowledge.ca. All Canadians are invited to test their investor knowledge and see how they measure up against the average investor—and learn a few crucial investing tips along the way. “Stay tuned for more programs from Bridgehouse dedicated to advancing investor knowledge,” Lynde said. “We are determined to work with advisors to give investors the tools they need to invest smartly for the long term. The award‐winning Brandes Scholarship Program1 and Bridgehouse Investor Knowledge Index and quiz are just the beginning.”

About the Survey

The Bridgehouse Investor Knowledge Index was conducted as an online survey of 1,004 investors across Canada with investable assets of at least $25,000. The survey was conducted by Environics Research between October 23‐30th, 2013.

About Bridgehouse Asset Managers

Bridgehouse Asset Managers, a trade name of Brandes Investment Partners & Co., offers tried‐and‐true investment solutions to Canadians, leveraging the expertise of three world‐class investment managers. In everything we do, we consider our clients. We are committed to partnering with investment professionals to help Canadians reach their financial goals and become smarter investors. We are defined by our:

Independence in ownership and thinking, which enables us to truly align with clients’ goals, and do the right thing for client portfolios and businesses—today and tomorrow.

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